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NEW DELHI: BhartiAirtel will share part of its submarine cable network with Reliance Industries' telecom arm, a rare partnership between two firms not known for their camaraderie.

The country's largest telco will provide Reliance Jio Infocomm data capacity on its undersea cable that links India and Singapore, enabling the Mukesh Ambani-owned venture to connect its proposed 4G network to the Asia-Pacific region.

The old rivals also held out the intriguing possibility of greater cooperation in the future. "Bharti and Reliance Jio will continue to build on this strategic framework and consider other mutual areas of cooperation and development to leverage their respective assets towards offering their customers a much richer experience," said a statement issued by both the companies, without specifying what these areas could be.

Two executives aware of the development said Bharti and Reliance were in discussions for an optic fibre-sharing deal that could be similar to the recent agreement between Reliance Jio Infocomm and Anil Ambani's Reliance Communications. Both Bharti and RIL declined comment on this.

Tuesday's pact marks a break in a narrative of rivalry between the two companies dating back to the early 2000s.

ANALYSTS WELCOME CONNECTIVITY AGREEMENT

In the early 2000s, Bharti and Reliance Industries fought a lengthy battle over allowing CDMA operators to offer full-fledged mobile services.

This was followed by a period of truce as the ownership of RIL's telecom business was transferred to Anil Ambani as part of the family settlement of 2005.

But RIL's ambitious re-entry into the telecom sector has reignited the old rivalry, with analysts anticipating a dramatic confrontation both within and outside the marketplace between the country's largest private company and the largest telecom company.

The two groups also compete against each other in retail. RIL's retail business crossed the Rs 10,000-crore revenue mark in 2012-13. While Bharti is a much smaller player in this business, the group is expected to grow it aggressively along with partner Walmart, now that the government has allowed foreign investments in the sector.

Analysts were quick to welcome the data connectivity agreement between the two. "Such deals are good from the industry point of view as they result in sharing of infrastructure, which is costly to build. It is a part of industry consolidation and could be a win-win for all, including the ultimate consumer," said Hemant Joshi, partner, Deloitte Haskins & Sells.

Executives close to Bharti said the company had a history of sharing infrastructure with competitors. They point out the company had taken the initiative to merge its towers with those of Vodafone and Idea to form Indus Towers.

Reliance Jio Infocomm and Reliance Communications had earlier announced their intention to work closely in telecom after the optic fibre-sharing deal, and the RIL spokesman did not provide reasons as to why the company chose Bharti over FLAG Telecom, the undersea cable network owned by an Anil Ambani-promoted company.

An executive close to Reliance Communications said RIL opted for Bharti since FLAG did not have connectivity on the Chennai-Singapore route. But this was disputed by a person close to Bharti, who said FLAG offered connectivity through other major business hubs in Asia, which in turn were liked to Singapore.

Analysts said there could be multiple reasons for RIL not choosing FLAG. "One of the reaons could be that since RCOM has put Reliance Globalcom on the block, the future ownership of the company remains unclear at present," said Rishi Tejpal, principal analyst with technology research firm Gartner.

Reliance Communications was in talks to sell Reliance Globalcom, the company that owns FLAG, to Bahrain Telecommunications, but talks were called off last week. The company has now said it is in discussions with a Samena Capital-led consortium of private equity funds.

RIL shares gained 1.7% on Tuesday to close at Rs 803.50, while the Bharti stock fell 0.43% to Rs 299.50. Shares in RCOM, which had gained as much as 77% over the past couple of weeks on the possibility of more deals with RIL and the likely sale of its undersea cable arm, fell 5% after Tuesday's announcement but recovered to close 3.3% lower at Rs 94.50.

According to the pact, Reliance Jio will use a dedicated fibre pair on i2i cable that connects Chennai with Tuas in Singapore.

"The high-speed link will enable Reliance Jio to extend its network and service reach to customers across the Asia-Pacific region. It will connect Reliance Jio directly to the world's major business hubs and Internet service providers, thereby helping the operator meet bandwidth demand and provide ultra-fast data experience to its customers," said the statement from both companies.